Bass Brewers, one of the world's biggest brewing companies, was buffeted in the early '90s by a reshaping of its core markets in the United Kingdom. New competitors, changing consumer tastes and government legislation produced a potent mix that demanded a different business approach.
The brewer responded with a major overhaul of its supply chain that swept away many internal barriers and more closely connected production with demand. Supply-chain management software from Numetrix Inc., Toronto, provided the technology to support this change.
"We (previously) had a traditional supply chain with a number of stocking depots," said Howard Stone, the brewer's logistics supply manager. Because of inadequate coordination and communication between production and distribution, "the typical lead time for orders was a week."
"The old model was less responsive" and unable to meet the service levels "now expected and essential to our business," he said. Bass now replenishes depot stock in 24 hours based on orders received from its customers, a process known as "Replenishment to Demand" (RTD). About 3,000 pubs and retailers - approximately 13 percent of Bass's customer base - place orders using EDI (Electronic Data Interchange). Electronic links for invoices, price lists, delivery notes and proof-of-delivery also are being implemented with key accounts.
The RTD process generally has lowered stock levels in depots from five days to less than one day, Stone said. In addition, the throughput capability of depots has significantly increased, and stock reaching customers is much fresher.
|Using the Numetrix LINX system, Bass models the entire brewery network to optimize the flow of materials and resources across all segments of the enterprise.|
|Bass Makes Beer, Third Party Makes Deliveries|
|Outsourcing has become a common practice, but Bass Brewers has taken a novel route to offloading costly distribution functions. "When you own your distribution network and are an own-account hauler, you can ever only focus on reducing costs because you have nowhere else to go," said Howard Stone, Bass logistics supply manager. That changed in 1993, when Bass established a joint venture called Tradeteam with third-party provider, Exel Logistics. The brewer's fleet of trucks and some buildings were sold to the new venture, of which Bass is the minority stockholder.|
"The joint venture company can now seek profit generation rather than cost reduction," Stone said. Since the enterprise is not a subsidiary of Bass and the brewer does not hold a controlling interest, Stone said, Tradeteam is free to compete for business on the open market.
Tradeteam is responsible for picking up product from Bass warehouses, assembling orders, and delivering to the end customer.
"My team does the replenishment from the brewery into the depot based on orders we have received," explained Stone. Tradeteam uses Bass's order information to plan distribution services and build secondary loads.
Wines and spirits, which can be picked at bottle level rather than at case level, are held centrally and transferred to the delivery depot overnight for consolidation with Bass products. Delivery is made within 48 hours of the order being received.
"We aim for a single, one-stop delivery to every customer," said Stone. "The 48 hours is used to pull everything together from different places, so that we can get the order to the customer in a single stop."
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